DuPont Decomposition
Why does CEATLTD earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.8% = 3.6% × 1.16 × 2.56
Latest: FY2025
Profitability
Net Margin
3.6%
4.6% →3.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.16x
0.30x →1.16x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.56x
2.80x →2.56x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.0 pp over 3 years. Driven by asset turnover improving (0.30x → 1.16x), leverage falling (2.80x → 2.56x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.6% | 0.30 | 2.80 | 3.9% |
| FY2024 | ₹0Cr | ₹0Cr | 3.4% | 0.30 | 2.47 | 2.5% |
| FY2025 | ₹0Cr | ₹0Cr | 3.6% | 1.16 | 2.56 | 10.8% |
How to read DuPont
- • Rising ROE from margin = pricing power, operational improvement (good)
- • Rising ROE from turnover = better asset utilization (good)
- • Rising ROE from leverage = more debt, amplified risk (caution)
- • Falling ROE across all three = structural deterioration (red flag)
DuPont decomposition from audited annual financials. Factual analysis, not investment advice.